Constellation Energy Group posts $74 million profit

As Maryland energy regulators prepare to review next week Constellation Energy Group's plan to sell itself to Exelon Corp., the Baltimore energy company posted Friday a $74 million profit in the third quarter.

The Baltimore company earned 36 cents per share for the three months ending Sept. 30, reversing a loss from a year ago.

A year earlier, the company reported a net loss of $1.4 million, or $6.99 per share, after taking large write-downs to reflect the reduced value of its nuclear power business and the cancellation of its nuclear development venture with French partner EDF.

The company said third-quarter earnings were hurt in part by Baltimore Gas and Electric Co.'s cleanup costs related to Hurricane Irene. Of the estimated $90 million in costs, BGE recorded $55 million, or 17 cents per share, as operating and maintenance costs.

BGE reported a loss of 1 cent per share, compared with a gain of 14 cents per share a year ago.

The company said its other businesses, such as selling power to wholesale customers, were solid.

Starting Monday, the Maryland Public Service Commission will begin hearings to review Constellation's proposed merger with Chicago-based Exelon.

Constellation CEO Mayo A. Shattuck III told analysts during a conference call Friday that the two companies put together a strong incentive package worth more than $250 million to convince regulators and consumers that the $7.9 billion deal would benefit ratepayers and Maryland.

Critics of the proposed merger have advanced other proposals to make the deal more palatable.

In particular, Shattuck predicted the companies' proposal to generate 25 megawatts of renewable energy will be the "most substantial" point of debate during the hearing.

State officials have countered with a request for up to 400 megawatts of renewable energy, a proposal that Exelon called "unacceptable."

When pressed on what would make the companies budge on the initial offer, Shattuck was noncommittal.

"Well, that's probably exactly what you would not want us to do over an earnings call," said Shattuck, who is scheduled to testify at the hearing Monday. "I can't give you any guidance because you can't really negotiate one component without thinking about the overall package."

Constellation shares gained 56 cents to close Friday at $39.80.

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